SIMPLY INTAXICATING

Black Money Saga

On Nov 8, 2016 late evening, the Prime Minister Narendra Modi flagged off the avalanche of Demonetisation which swept all of us off our feet. Since that fateful evening every passing day has been action packed. With the Government coming out with knee jerk changes every now and then, it has only added to more questions, confusion and apprehensions. There are broadly two opinions on the entire issue of demonetisation. The first school of thoughts claims that demonetisation has short term pain but long term gain, whereas the other opinion that it is an economic HARAKIRI and the benefits are too little or none.

While demonetisation is a radical measure taken to curb black money, it can cause ripple effect with far reaching consequences on the production, consumption, agriculture and over the overall health of any economy. There are several questions related to demonetisation which remains unanswered. Like what will be the taxation incidence on the deposits between Nov 9 - Dec 30, 2016? Whether this measure will be able to curtail the flow of generation of black money? How much dent it will be able to make into the current stock of black money when large chunk of it may have been already laundered and converted into legitimate forms? Isn't this sudden push towards cashless economy premature, when vast chunk of Indian rural population remains untouched by the digital revolution?